9
InstructionMultiple Choice

America’s Entry into the War

Question 9 • TX-Art I A

Between permanent life insurance and term life insurance, which typically has the lower premium and why?

Answer
A
Term life insurance has the lower premium because term life insurance pays the face value to your beneficiary if you die within a certain set period of time, whereas whole life insurance covers you your entire life.
B
Term life insurance has the lower premium because you cannot renew the insurance after your term has ended.
C
Permanent life insurance has the lower premium because you are making more premium payments (your whole life versus a set period of time), so the amount per premium payment is less.
D
Permanent life insurance has the lower premium because the amount you contribute is then invested and makes interest for the life insurance company.

Explanation

Term life insurance typically costs less because it provides coverage for a limited period, rather than for your entire life. It generally pays the benefit only if you die while the term is in effect, whereas permanent insurance is designed to cover you for life. Choice A gives this key distinction; whether a term policy can be renewed does not explain why its premium is usually lower.

AI-written and checked against the verified answer.

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